First, I doubt this C-130 gift is some kind of peace offering made to dampen any Indonesian disquiet about the US basing announcement. Yes, the Indonesians are cool on the deal, but Jakarta also likes having the Americans around, a point illustrated by the announcement that the US is giving Indonesia 24 second-hand F-16 fighters. Indonesia will pay for the $750 million upgrade of the aircraft.

Secondly, and this is much more important: Australia needs to modernise its thinking about Indonesia.

We're used to thinking about Indonesia in one of two ways: as a country that needs our help (the Asian currency crisis; the Boxing Day tsunami), or as one that poses a threat (from terrorists, refugees, local law enforcement against our tourists, or Indonesia's military forces). What we have yet to internalise is the fact that Indonesia is a highly promising emerging economy with a middle class of fifty million people; it's a country that could soon dwarf us.

Another aviation story emerging from Obama's Bali visit illustrates this point: Indonesian budget carrier Lion Air used the presidential visit to announce a deal for 230 Boeing 737s, with an option for 150 more. Even for one of the big American or Middle Eastern carriers, that would be a massive order, and it illustrates the current size and untapped potential of the Indonesian economy.